**United      States**

**Securities      and Exchange Commission**

**Washington,      DC 20549**

**FORM      10-QSB/A**

**Amendment      #1**

**June      30, 2006**

**000-28789**

**Falcon      Ridge Development Inc.**

| **Nevada**                                                                                    |   | **84-1461919**                                  |
|-----------------------------------------------------------------------------------------------|--------|-------------------------------------------------|
| (State                or other jurisdiction of incorporation)                                 |   | (IRS                Employer File Number)  |
|                                                                                          |   |                                            |
|  **5111                Juan Tabo Boulevard N.E. Albuquerque, New                Mexico** |   |  **87111**                                 |
| (Address                of principal executive offices)                                  |   | (zip                code)                  |
|                                                                                          |   |                                            |

**(866)      302-2248**
** **

**Yes      [X]**

**No      [X]**

**752,262,441      shares of common stock.**

**No      [X]**

----

**TABLE      OF CONTENTS**

|                                                                                                                                                                                                                                                      |   | **Page** |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|
| PART                I- FINANCIAL INFORMATION                                                                                                                                                                                                         |   |     |
|  Item                1. Financial Statements.                                                                                                                                                                                                        |   |     |
|       Balance                Sheet (Unaudited) at June 30, 2006                                                                                                                                                   |   | 1   |
|      Statements                of                Operations (Unaudited) for the three months                        and six months ended June 30, 2006 and 2005                                         |   | 2   |
|      Statements                  of                  Shareholders' Deficit (Unaudited) for the for the three months and                  six months                         ended June 30,2006 and 2005 |   | 3   |
|      Notes                to Consolidated Financial Statements                                                                                                                                                                   |   | 4   |
|                    Statements                of                Cash Flows (unaudited) , for the six months ended June 30, 2006 and                2005                                                                           |   | 5   |
|                                                                                                                                                                                                                                                      |   |     |
|  Item                2. Management's Discussion and Analysis or Plan of                Operation.                                                                                                                                                    |   | 14       |
|  Item                3. Controls and Procedures                                                                                                                                                                                                      |   | 18       |
|                                                                                                                                                                                                                                                 |   |     |
| PART                II - OTHER INFORMATION                                                                                                                                                                                                           |   |     |
|  Item                1. Legal Proceedings.                                                                                                                                                                                                           |   | 19       |
|  Item                2. Unregistered Sales of Equity Securities and Use of                Proceeds                                                                                                                                                   |   | 19       |
|  Item                3. Defaults Upon Senior Securities.                                                                                                                                                                                             |   | 19       |
|  Item                4. Submission of Matters to a Vote of Security Holders.                                                                                                                                                                         |   | 19       |
|  Item                5. Other Information.                                                                                                                                                                                                           |   | 19       |
|  Item                6. Exhibits and Reports on Form 8-K.                                                                                                                                                                                            |   | 20       |
|  Signatures                                                                                                                                                                                                                                          |   | 20       |

----

**FALCON        RIDGE DEVELOPMENT, INC.**

**BALANCE        SHEET**

**(Unaudited)**

| **Assets**                                                              |   |   |       |
|-------------------------------------------------------------------------|--------|--------|------------|
|                                                                    |   |   |       |
|                                                                    |   |   |       |
| Real                    estate held for sale                            |   | $      | 2,727,901  |   |
| Fixed                    assets, net of accumulated depreciation        |   |   | 37,432     |   |
| Cash                                                                    |   |   | 64,178     |   |
| Prepaid                    expenses                                     |   |   | —    |   |
| Other                    assets                                         |   |   | 220        |   |
| Total                    assets                                    |   | $      | 2,829,731  |   |
|                                                                    |   |   |            |   |
| **Liabilities                    and Shareholders' Equity**             |   |   |            |   |
|                                                                    |   |   |            |   |
| **Liabilities**                                                         |   |   |            |   |
| Indebtedness                    to related parties                      |   | $      | 1,002,372  |   |
| Note                    payable, long-term                              |   |   | 379,830    |   |
| Accounts                    payable                                     |   |   | 155,062    |   |
| Retainage                    payable                                    |   |   | 100,000    |   |
| Accrued                    expenses                                     |   |   | 59,391     |   |
| Preferred                    stock subject to mandatory redemption      |   |   | 415,000    |   |
| Total                    liabilities                               |   |   | 2,111,655  |   |
|                                                                    |   |   |            |   |
| **Shareholders'                    Equity**                        |   |   |            |   |
| Preferred                    stock,Class A .0001 par value,             |   |   |            |   |
| 400,000                    shares authorized, 160,000 shares issued and |   |   |            |   |
| outstanding                                                             |   |   | 400,000    |   |
|                                                                    |   |   |            |   |
| Common                    stock, $0.001 par value, 900,000,000 shares   |   |   |            |   |
| authorized,                    752,262,441 shares issued and            |   |   |            |   |
| outstanding                                                             |   |   | 752,262    |   |
|                                                                    |   |   |       |   |
| Additional                    paid-in capital                           |   |   | 899,420    |   |
|                                                                    |   |   |            |   |
| Accumulated                    equity                                   |   |   | (1,333,606 | ) |
|                                                                    |   |   |            |   |
|  Total                    Liabilities and Shareholders' Deficit    |   |   | (718,076   | ) |
|                                                                    |   |   |            |   |
|                                                                    |   | $      | 2,829,731  |   |

----

**FALCON          RIDGE DEVELOPMENT, INC.**

**STATEMENT          OF OPERATIONS**

**(Unaudited)**

|                                                                 |   | **Three                      Months Ended** |        |     |   | **Six                      Months Ended** |   |     |        |
|----------------------------------------------------------------------|--------|---------------------------------------------|-------------|----------|--------|-------------------------------------------|--------|----------|-------------|
|                                                                 |   | **June                      30**            |        |     |   | **June                      30**          |   |     |        |
|                                                                 |   | **2006**                                    |        | **2005** |   | **2006**                                  |   | **2005** |        |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |
| Lot                      sales:                                      |   |                                        |        |     |   |                                      |   |     |        |
| Net                      sales                                       |   | $                                           | —     |     | $      | 2,808,159                                 |   | $        | —     |   | $ | 5,824,945.00 |   |
| Costs                      of sales                                  |   |                                        | —     |     |   | (2,390,709                                | )      |     | —     |   |   | (5,261,696.00 | ) |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Gross                      profit (loss)                        |   |                                        | —     |     |   | 417,450                                   |   |     | —     |   |   | 563,249 |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Selling,                      general and administrative expenses    |   |                                        | 171,978     |     |   | 174,646                                   |   |     | 264,756     |   |   | 191,490 |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Loss                      (income) before provision for income taxes |   |                                        | (171,978    | )        |   | 242,804                                   |   |     | (264,756    | ) |   | 371,759 |   |
| Income                      taxes                                    |   |                                        | —     |     |   | —                                   |   |     | —     |   |   | — |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Loss                                                                 |   |                                        | (171,978    | )        |   | 242,804                                   |   |     | (264,756    | ) |   | 371,759 |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Proforma                      adjustments:                           |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Members'                      distributions (note 2)                 |   |                                        | —     |     |   | (15,000                                   | )      |     | —     |   |   | (30,000 | ) |
| Income                      taxes                                    |   |                                        | —     |     |   | —                                   |   |     | —     |   |   | (96,918 | ) |
| Proforma                      Loss                              |   | $                                           | (171,978    | )        | $      | 227,804                                   |   | $        | (264,756    | ) |   | 244,841 |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Loss                      per share                                  |   | $                                           | —     |     | $      | —                                   |   | $        | —     |   |   | — |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |
| Weighted                      average number of shares outstanding   |   |                                        | 752,262,441 |     |   | 118,632,686                               |   |     | 752,262,441 |   |   | 110,647,249 |   |
|                                                                 |   |                                        |        |     |   |                                      |   |     |        |   |   |   |   |

----

**FALCON          RIDGE DEVELOPMENT, INC.**

**STATEMENT          OF SHAREHOLDER'S DEFICIT**

**(Unaudited)**

|                                                                              |   | **Preferred                        Stock**Shares |    | **Par                      value** |   | **Common                        Stock**Shares |   | **Par                      Value** |        | **Additional                        p****aid-in****capital** |   | **Accumulated****deficit** |   | **Total** |     |
|-----------------------------------------------------------------------------------|--------|--------------------------------------------------|---------|------------------------------------|--------|-----------------------------------------------|--------|------------------------------------|-------------|--------------------------------------------------------------|--------|----------------------------|--------|-----------|----------|
|                                                                              |   |                                             |    |                               |   |                                          |   |                               |        |                                                         |   |                       |   |      |     |
| Balance                      at January                      1, 2005              |   |                                             | — |                               | $      | —                                       |   |                               | 100,000,000 |                                                         | $      | 100,000                    |   | $         | 210,644  |   | $ | (882,288 | ) | $ | (571,644 | ) |
|                                                                              |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
| Dividend                      distribution                                        |   |                                             | — |                               |   | —                                       |   |                               | —     |                                                         |   | —                    |   |      | —  |   |   | (30,000 | ) |   | (30,000 | ) |
| Merger                      with PocketSpec                                       |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
| Technologies,                      Inc (Note 1)                                   |   |                                             | — |                               |   | —                                       |   |                               | 37,265,372  |                                                         |   | 37,265                     |   |      | —  |   |   | (37,265 | ) |   | — |   |
| Stock                      issuance for                                           |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
| Spanish                      Trails, LLC (Note 2)                                 |   |                                             | — |                               |   | —                                       |   |                               | 614,882,069 |                                                         |   | 614,882                    |   |      | (210,644 | ) |   | (402,238 | ) |   | 2,000 |   |
| Compensation                                                                      |   |                                             | — |                               |   |                                               |   |                               | 115,000     |                                                         |   | 115                        |   |      | 2,185    |   |   |  |   |   | 2,300 |   |
| Stock                      issuance for Cash                                      |   |                                             | 160,000 |                               |   | 400,000                                       |   |                               | —     |                                                         |   | —                    |   |      | —  |   |   | — |   |   | 400,000 |   |
| Adjustment                      for prior period (note 9)                         |   |                                             | — |                               |   | —                                       |   |                               | —     |                                                         |   | —                    |   |      | 897,235  |   |   | 402,238 |   |   | 1,299,473 |   |
| Loss                                                                              |   |                                             | — |                               |   | —                                       |   |                               | —     |                                                         |   | —                    |   |      | —  |   |   | (119,297 | ) |   | (119,297 | ) |
|                                                                              |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
|                                                                              |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
| Balance                      at December 31, 2005                                 |   |                                             | 160,000 |                               | $      | 400,000                                       |   |                               | 752,262,441 |                                                         | $      | 752,262                    |   | $         | 899,420  |   | $ | (1,068,850 | ) | $ | 982,832 | ) |
|                                                                              |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
| Balance                      at January                      1, 2006              |   |                                             | 160,000 |                               | $      | 400,000                                       |   |                               | 752,262,441 |                                                         | $      | 752,262                    |   | $         | 899,420  |   | $ | (1,068,850 | ) | $ | 982,832 | ) |
|                                                                              |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
| Stock                      issuance for Cash                                      |   |                                             | 166,000 |                               |   | 415,000                                       |   |                               | —     |                                                         |   | —                    |   |      | —  |   |   | — |   |   | 415,000 |   |
| Reclassified                      preferred stock subject to mandatory redemption |   |                                             | — |                               |   | (415,000                                      | )      |                               | —     |                                                         |   | —                    |   |      | —  |   |   | — |   |   | (415,000 | ) |
| Loss                                                                              |   |                                             | — |                               |   | —                                       |   |                               | —     |                                                         |   | —                    |   |      | —  |   |   | (264,756 | ) |   | (264,756 | ) |
|                                                                              |   |                                             |         |                               |   |                                               |   |                               |             |                                                         |   |                            |   |      |          |   |   |  |   |   |  |   |
| Balance                      at June                      30, 2006                |   |                                             | 326,000 |                               | $      | 815,000                                       |   |                               | 752,262,441 |                                                         | $      | 752,262                    |   | $         | 899,4205 |   | $ | (1,333,606 | ) | $ | 718,076 | ) |

----

**FALCON              RIDGE DEVELOPMENT, INC.**

**STATEMENT              OF CASH FLOWS**

**(Unaudited)**

|                                                                     |   | **Period                        Ended** |     |
|--------------------------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                                     |   | **June                        30**      |     |
|                                                                     |   | **2006**                                |     | **2005** |   |
| Cash                        flows from operating activities:             |   |                                    |     |   |   |
| Net                        income/loss                                   |   | $                                       | (264,756 | ) | $ | 371,759 |   |
| Adjustments                        to reconcile net loss to net cash     |   |                                    |     |   |   |   |   |
| used                        by operating activities:                     |   |                                    |     |   |   |   |   |
| Depreciation                                                             |   |                                    | 2,100    |   |   | — |   |
| Changes                        in operating assets and liabilities,      |   |                                    |     |   |   |   |   |
| excluding                        effects of business combinations:       |   |                                    |     |   |   |   |   |
| Land                        development costs                            |   |                                    | (253,599 | ) |   | 3,523,422 |   |
| Prepaid                        expenses                                  |   |                                    | 13,540   |   |   | — |   |
| Other                        current assets                              |   |                                    | —  |   |   | 45,461 |   |
| Acquisition                        and development notes                 |   |                                    | —  |   |   | (3,868,625 | ) |
| Accounts                        payable                                  |   |                                    | (211,673 | ) |   | (344,920 | ) |
| Deferred                        revenue                                  |   |                                    | —  |   |   | (138,000 | ) |
| Net                        cash (used in) provided by               |   |                                    |     |   |   |   |   |
|  operating                        activities                        |   |                                    | (714,388 | ) |   | (410,903 | ) |
|                                                                     |   |                                    |     |   |   |   |   |
| Cash                        flows from investing activities:             |   |                                    |     |   |   |   |   |
|                                                                     |   |                                    |     |   |   |   |   |
| Acquisition                        of fixed assets                       |   |                                    | (6,319   | ) |   | (7,577 | ) |
|                                                                     |   |                                    |     |   |   |   |   |
| Net                        cash used in                             |   |                                    |     |   |   |   |   |
|  investing                        activities                        |   |                                    | (6,319   | ) |   | (7,577 | ) |
|                                                                     |   |                                    |     |   |   |   |   |
| Cash                        flows from financing activities:             |   |                                    |     |   |   |   |   |
| Decrease                        in related party indebtedness            |   |                                    | (88,966  | ) |   | 416,000 |   |
| Proceeds                        from acquisition and development notes   |   |                                    |     |   |   | 430,822 |   |
| Repayments                        of acquisition and development notes   |   |                                    |     |   |   | (416,558 | ) |
| Repayments                        of real estate contract                |   |                                    | (9,218   | ) |   | — |   |
| Proceeds                        from preferred shares                    |   |                                    | 415,000  |   |   | — |   |
| Dividend                        paid                                     |   |                                    | —  |   |   | (30,000 | ) |
| Net                        cash used in                             |   |                                    |     |   |   |   |   |
|  financing                        activities                        |   |                                    | 316,816  |   |   | 400,264 |   |
|                                                                     |   |                                    |     |   |   |   |   |
|                                                                     |   |                                    |     |   |   |   |   |
| Net                        change in cash                           |   |                                    | (403,891 | ) |   | (18,216 | ) |
|                                                                     |   |                                    |     |   |   |   |   |
| Cash:                                                                    |   |                                    |     |   |   |   |   |
| Beginning                        of period                               |   |                                    | 468,069  |   |   | 158,834 |   |
|                                                                     |   |                                    |     |   |   |   |   |
| End                        period                                        |   | $                                       | 64,178   |   | $ | 140,618 |   |
|                                                                     |   |                                    |     |   |   |   |   |
|                                                                     |   |                                    |     |   |   |   |   |
| Supplemental                        disclosure of cash flow information: |   |                                    |     |   |   |   |   |
| Cash                        paid during the year for:                    |   |                                    |     |   |   |   |   |
| Income                        taxes                                      |   | $                                       | —  |   | $ | — |   |
| Interest                                                                 |   | $                                       | 11,682   |   | $ | 76,256 |   |

----

**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

----

**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

----

**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

----

**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

----

**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

----

**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

| Note                  payable to Karen Duran, interest at 12%, principal and interest                  payable in                  annual installments of $17,000 |   |   |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|-----------|
| Total                  financing under the agreement is $200,000                                                                                                  |   | $      | 191,000   |   |
|                                                                                                                                                              |   |   |      |   |
| Note                  payable to Karen Duran, interest at 8.5%, principal                  and interest payable May 25,2007                                       |   |   |      |   |
| Total                  financing under the agreement is $150,000                                                                                                  |   |   | 150,000   |   |
|                                                                                                                                                              |   |   |      |   |
| Advances                  payable to Falcon Ridge Development LLC, an affiliate, payable                  on                  demand                              |   |   | 628,099   |   |
|                                                                                                                                                              |   |   |      |   |
| Accrued                  interest payable                                                                                                                         |   |   | 33,276    |   |
|                                                                                                                                                              |   |   |      |   |
|                                                                                                                                                              |   | $      | 1,002,375 |   |
|                                                                                                                                                              |   |   |      |   |

----

**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

|      |   | Cost   |   | Accumulated                Depreciation |   |
|-----------|--------|--------|--------|-----------------------------------------|--------|
|      |   |   |   |                                    |   |
| Software  |   | $      | 32,349 |                                    | $      | 1,302 |   |
| Equipment |   |   | 7,981  |                                    |   | 1,596 |   |
|      |   |   |   |                                    |   |   |   |
|      |   | $      | 40,330 |                                    | $      | 2,898 |   |
|      |   |   |   |                                    |   |   |   |

| Land                acquisition costs |   | $      | 2,139,362    |   |
|---------------------------------------|--------|--------|--------------|--------|
| Land                development costs |   |   | 512,322      |   |
| Capitalized                interest   |   |   |  76,217 |   |
|                                  |   |   |         |   |
|                                  |   | $      | 2,727,901    |   |

| Note                payable to Toby and Mary Ann Cordova, with interest at 6.5 percent,                principal and interest payable in semi-annual installments of $21,862,                collateralized by a real estate contract |   |   |    |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|---------|
| Total                financing under the agreement is $435,000                                                                                                                                                                        |   | $      | 379,380 |   |

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**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

| U.S.                statutory federal rate                                                       |   |   | 20.000  | %      |
|--------------------------------------------------------------------------------------------------|--------|--------|---------|--------|
| State                income tax rate                                                             |   |   | 4.80    | %      |
| Net                operating loss for which no tax benefit is currently                available |   |   | -24.800 | %      |
|                                                                                             |   |   |    |   |
|                                                                                             |   |   | 0.00    | %      |

|   | · | Shares                are non-cumulative with a preference over common shares if and when                a                dividend is declared. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                are convertible into common stock at any time on the basis of 100                common                shares for 1 share of preferred stock. This conversion rate is subject                to                adjustments for forward or reverse splits or other capitalizations.                The                option was of no intrinsic benefit, at the commitment date, to the                preferred shareholder. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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**FALCON      RIDGE DEVELOPMENT, INC.**

**Notes      to Consolidated Financial Statements**

**(Unaudited)**

|   | · | Shares                have a priority over common shares upon                liquidation. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Shares                are callable at any time by the Company at the original purchase                price.                The Preferred Shareholders will have thirty days thereafter to convert                to                common stock. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                are non-cumulative with a preference over common shares if and when                a                dividend is declared. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Investor                will receive interest of 12% per annum payable monthly for a period                of                eighteen months from the date of                purchase. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                are convertible into common stock at any time on the basis of 75%                of the                average current bid price for the preceeding 20 days of the Company's                receipt of notice to convert. This conversion rate is subject to                adjustments for forward or reverse splits or other capitalizations.                The                option was of no intrinsic benefit, at the commitment date, to the                preferred shareholder. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                have a priority over common shares upon                liquidation. |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | Shares                are callable by the Company at any time after 12 months of issuance                of                Preferred B shares at the original purchase price. The Preferred                Shareholders will have sixty days thereafter to convert to common                stock. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                  are non-cumulative with a preference over common shares if and                  when a                  dividend is declared. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Investor                  will receive a dividend of 12% per annum payable monthly for a                  period of                  eighteen months from the date of                  purchase. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                  are convertible into common stock at any time on the basis of 75%                  of the                  average current bid price for the preceding 20 days of the Company's                  receipt of notice to convert. This conversion rate is subject to                  adjustments for forward or reverse splits or other capitalizations.                  The                  option was of no intrinsic benefit, at the commitment date, to                  the                  preferred shareholder. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                  have a priority over common shares upon                  liquidation. |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Shares                  are callable by the Company at any time after 12 months of issuance                  of                  Preferred B shares at the original purchase price. The Preferred                  Shareholders will have sixty days thereafter to convert to common                  stock.                  The shares will be repurchased after eighteen months for the original                  issue price. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|   | · | Shares                  are non-cumulative with a preference over common shares if and                  when a                  dividend is declared. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Investor                  will receive a dividend of 12% per annum payable monthly for a                  period of                  eighteen months from the date of                  purchase. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                  are convertible into common stock at any time on the basis of 75%                  of the                  average current bid price for the preceding 20 days of the Company's                  receipt of notice to convert. This conversion rate is subject to                  adjustments for forward or reverse splits or other capitalizations.                  The                  option was of no intrinsic benefit, at the commitment date, to                  the                  preferred shareholder. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Shares                  have a priority over common shares upon                  liquidation. |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | Shares                  are callable by the Company at any time after 12 months of issuance                  of                  Preferred B shares at the original purchase price. The Preferred                  Shareholders will have sixty days thereafter to convert to common                  stock.                  The shares will be repurchased after eighteen months for the original                  issue price. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                                                     |   |  As       |       | As       |   |
|--------------------------------------------------------------------------|--------|----------------|------------|----------|--------|
|                                                                     |   |  Reported |       | Restated |   |
| **Assets**                                                               |   |      |       |     |   |
| Cash                                                                     |   | $              | 468,069    |     |   | 468,069 |   |
| Real                  estate held for resale                             |   |           | 1,174,829  |     |   | 2,474,302 |   |
| Property                  and equipment, net of accumulated depreciation |   |           | 33,213     |     |   | 33,213 |   |
| Prepaid                  expenses                                        |   |           | 13,540     |     |   | 13,540 |   |
| Other                  assets                                            |   |           | 220        |     |   | 220 |   |
| Total                  assets                                            |   | $              | 1,689,871  |     |   | 2,989,344 |   |
|                                                                     |   |           |       |     |   |   |   |
| **Liabilities                  and Shareholders' Deficit**               |   |           |       |     |   |   |   |
|                                                                     |   |           |       |     |   |   |   |
| **Liabilities**                                                          |   |           |       |     |   |   |   |
| Indebtedness                  to related parties                         |   | $              | 1,091,338  |     |   | 1,091,338 |   |
| Note                  payable, current portion                           |   |           | 18,737     |     |   | 18,737 |   |
| Note                  payable, long-term portion                         |   |           | 370,311    |     |   | 370,311 |   |
| Accounts                  payable                                        |   |           | 293,200    |     |   | 293,200 |   |
| Retainage                  payable                                       |   |           | 151,627    |     |   | 151,627 |   |
| Accrued                  expenses                                        |   |           | 81,299     |     |   | 81,299 |   |
|                                                                     |   |           |       |     |   |   |   |
|                                                                     |   |           | 2,006,512  |     |   | 2,006,512 |   |
|                                                                     |   |           |       |     |   |   |   |
| **Shareholders'                  deficit**                               |   |           |       |     |   |   |   |
| Preferred                  stock,Class A no par value,                   |   |           |       |     |   |   |   |
| 400,000                  shares authorized, 160,000 shares issued and    |   |           |       |     |   |   |   |
| outstanding                                                              |   |           | 400,000    |     |   | 400,000 |   |
|                                                                     |   |           |       |     |   |   |   |
| Common                  stock, $0.001 par value, 900,000,000 shares      |   |           |       |     |   |   |   |
| authorized,                  752,262,441 shares issued and               |   |           |       |     |   |   |   |
| outstanding                                                              |   |           | 752,262    |     |   | 752,262 |   |
| Additional                  paid-in capital                              |   |           | —    |     |   | 899,420 |   |
|                                                                     |   |           |       |     |   |   |   |
| Accumulated                  deficit                                     |   |           | (1,468,903 | )        |   | (1,068,850 | ) |
|                                                                     |   |           |       |     |   |   |   |
| Total                  shareholders' deficit                             |   |           | (316,641   | )        |   | 982,832 |   |
|                                                                     |   |           |       |     |   |   |   |
| Total                  liabilities and shareholders' deficit             |   | $              | 1,689,871  |     |   | 2,989,344 |   |

----

**ITEM      2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF      OPERATION.**

----

----

----

----

**ITEM      3. CONTROLS AND PROCEDURES**

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**PART      II. OTHER INFORMATION**

**ITEM      1. LEGAL PROCEEDINGS**

**ITEM      2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS.**

**ITEM      3. DEFAULTS UPON SENIOR SECURITIES**

**ITEM      4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS**

**ITEM      5. OTHER INFORMATION**

----

**ITEM      6. EXHIBITS AND REPORTS ON FORM 8-K**

| **Exhibit****No.** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1                |   | Agreement                and Plan of Reorganization - Pocketspec Technologies, Inc. and Sierra                Norte LLC (a)                                                                                                                                                                                                                                                                                                                      |
| 2.2                |   | Acquisition                Agreement - Pocketspec Technologies, Inc. and Spanish Trails, LLC                (b)                                                                                                                                                                                                                                                                                                                                  |
| 3.1                |   | Articles                of Incorporation of Falcon Ridge Development, Inc. previously                filed.                                                                                                                                                                                                                                                                                                                                      |
| 3.2                |   | Bylaws                of Falcon Ridge Development, Inc. previously filed.                                                                                                                                                                                                                                                                                                                                                                        |
| 3.3                |   | Articles                of Organization of Sierra Norte, LLC previously filed.                                                                                                                                                                                                                                                                                                                                                                   |
| 3.4                |   | Operating                Agreement of Sierra Norte, LLC previously filed.                                                                                                                                                                                                                                                                                                                                                                        |
| 3.5                |   | Articles                of Organization of Spanish Trails, LLC previously                filed.                                                                                                                                                                                                                                                                                                                                                  |
| 3.6                |   | Operating                Agreement of Spanish Trails, LLC previously filed.                                                                                                                                                                                                                                                                                                                                                                      |
| 4.1                |   | Articles                of Amendment - Establishment of Series of Preferred Stock previously                filed.                                                                                                                                                                                                                                                                                                                               |
| 10.1               |   | Purchase                Agreement - Spanish Trails, LLC and D.R. Horton* (Confidential portions                of                this agreement noted by *** have been omitted and filed separately                with                the Securities and Exchange Commission pursuant to a request for                confidentiality under Rule 24b-2 of the Securities Exchange Act of                1934.)                Previously filed. |
| 10.2               |   | Promissory                Note - Karen Y. Duran - Sierra Norte, LLC - May 20, 2005 - $150,000                previously filed.                                                                                                                                                                                                                                                                                                                   |
| 10.3               |   | Promissory                Note - Karen Y. Duran - Sierra Norte, LLC - June 1, 2005 - $200,000                previously filed.                                                                                                                                                                                                                                                                                                                   |
| 10.4               |   | Promissory                Note - Karen Y. Duran - Sierra Norte, LLC - June 19, 2005 - $66,000                previously filed.                                                                                                                                                                                                                                                                                                                   |
| 14.1               |   | Code                of Ethics previously filed.                                                                                                                                                                                                                                                                                                                                                                                                  |
| 21.1               |   | List                of Subsidiaries previously filed.                                                                                                                                                                                                                                                                                                                                                                                            |
| 23.1               |   | Consents                of experts                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.1               |   | Certification                of Chief Executive Officer pursuant to Rule                13a-14(a)/15(d)-14(a)*                                                                                                                                                                                                                                                                                                                                   |
| 31.2               |   | Certification                of Chief Financial Officer pursuant to Rule                13a-14(a)/15(d)-14(a)*                                                                                                                                                                                                                                                                                                                                   |
| 32.1               |   | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002*                                                                                                                                                                                                                                   |
| 32.2               |   | Certification                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002*                                                                                                                                                                                                                                   |
| 99                 |   | Additional                Exhibits - None                                                                                                                                                                                                                                                                                                                                                                                                        |

|   | (a) | Filed                on May 25, 2005 as Exhibit 2.1 with the Registrant's Current Report                on                Form 8-K and incorporated herein by                reference. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (b) | Filed                on July 8, 2005 as Exhibit 10.19 with the Registrant's Current Report                on                Form 8-K and incorporated herein by                reference. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | b. | Reports                on Form 8-K |
|--------|----|------------------------------------|

----

**SIGNATURES**

|                                                    |   | Falcon                Ridge Development, Inc.                        |
|---------------------------------------------------------|--------|----------------------------------------------------------------------|
| Dated:                Februrary                21, 2007 | By:    | /s/                Fred M. Montano                                   |
|                                                    |   | Fred                M. Montano                                       |
|                                                    |   | President,                Chief Executive Officer, and Director      |
|                                                    |   |                                                                 |
| Dated:                Februrary                21, 2007 | By:    | /s/                Karen Y. Duran                                    |
|                                                    |   | Karen                Y. Duran                                        |
|                                                    |   | Vice                President, Treasurer and Chief Financial Officer |
|                                                    |   |                                                                 |
|                                                    |   |                                                                 |

----

**EXHIBIT      INDEX**

| **Exhibit****No.** |   | **Description**                                                                                                                                                                                                                                                                                                                                                                                                                                  |
|--------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2.1                |   | Agreement                and Plan of Reorganization - Pocketspec Technologies, Inc. and Sierra                Norte LLC (a)                                                                                                                                                                                                                                                                                                                      |
| 2.2                |   | Acquisition                Agreement - Pocketspec Technologies, Inc. and Spanish Trails, LLC                (b)                                                                                                                                                                                                                                                                                                                                  |
| 3.1                |   | Articles                of Incorporation of Falcon Ridge Development, Inc. previously                filed.                                                                                                                                                                                                                                                                                                                                      |
| 3.2                |   | Bylaws                of Falcon Ridge Development, Inc. previously filed.                                                                                                                                                                                                                                                                                                                                                                        |
| 3.3                |   | Articles                of Organization of Sierra Norte, LLC previously filed.                                                                                                                                                                                                                                                                                                                                                                   |
| 3.4                |   | Operating                Agreement of Sierra Norte, LLC previously filed.                                                                                                                                                                                                                                                                                                                                                                        |
| 3.5                |   | Articles                of Organization of Spanish Trails, LLC previously                filed.                                                                                                                                                                                                                                                                                                                                                  |
| 3.6                |   | Operating                Agreement of Spanish Trails, LLC previously filed.                                                                                                                                                                                                                                                                                                                                                                      |
| 4.1                |   | Articles                of Amendment - Establishment of Series of Preferred Stock previously                filed.                                                                                                                                                                                                                                                                                                                               |
| 10.1               |   | Purchase                Agreement - Spanish Trails, LLC and D.R. Horton* (Confidential portions                of                this agreement noted by *** have been omitted and filed separately                with                the Securities and Exchange Commission pursuant to a request for                confidentiality under Rule 24b-2 of the Securities Exchange Act of                1934.)                Previously filed. |
| 10.2               |   | Promissory                Note - Karen Y. Duran - Sierra Norte, LLC - May 20, 2005 - $150,000                previously filed.                                                                                                                                                                                                                                                                                                                   |
| 10.3               |   | Promissory                Note - Karen Y. Duran - Sierra Norte, LLC - June 1, 2005 - $200,000                previously filed.                                                                                                                                                                                                                                                                                                                   |
| 10.4               |   | Promissory                Note - Karen Y. Duran - Sierra Norte, LLC - June 19, 2005 - $66,000                previously filed.                                                                                                                                                                                                                                                                                                                   |
| 14.1               |   | Code                of Ethics previously filed.                                                                                                                                                                                                                                                                                                                                                                                                  |
| 21.1               |   | List                of Subsidiaries previously filed.                                                                                                                                                                                                                                                                                                                                                                                            |
| 23.1               |   | Consents                of experts                                                                                                                                                                                                                                                                                                                                                                                                               |
| 31.1               |   | Certification                of Chief Executive Officer pursuant to Rule                13a-14(a)/15(d)-14(a)*                                                                                                                                                                                                                                                                                                                                   |
| 31.2               |   | Certification                of Chief Financial Officer pursuant to Rule                13a-14(a)/15(d)-14(a)*                                                                                                                                                                                                                                                                                                                                   |
| 32.1               |   | Certification                of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002*                                                                                                                                                                                                                                   |
| 32.2               |   | Certification                of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as                adopted                pursuant to Section 906 of the Sarbanes-Oxley Act of                2002*                                                                                                                                                                                                                                   |
| 99                 |   | Additional                Exhibits - None                                                                                                                                                                                                                                                                                                                                                                                                        |

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